Cabinet, economics ministry censured over China Steel

Staff writer, with CNA

Sat, Feb 09, 2013 - Page 3

The Control Yuan earlier this week censured the Cabinet and the Ministry of Economic Affairs for failing to oversee tenders held by the government-invested China Steel Corp.

The government’s top watchdog body said the failures led to irregularities related to a bribery case involving a former top Cabinet official.

China Steel lacks a standard mechanism governing purchases and tenders and can therefore decide who to sign contracts with at will, Control Yuan member Yeh Yao-peng (葉耀鵬) said.

Moreover, its purchases and tenders are not overseen by the legislature, Yeh said, adding that this oversight led to the bribery scandal involving former Executive Yuan secretary-general Lin Yi-shih (林益世).

While the Cabinet and the ministry have a say in China Steel’s management appointments and operations, they have failed to properly oversee the company’s tendering process and prevent political interference, the Control Yuan said.

Lin was indicted in October last year for helping Greater Kaohsiung-based Ti Yung Industrial Co to secure a slag treatment contract from a subsidiary of China Steel Corp in 2010 in his capacity as a Chinese Nationalist Party (KMT) lawmaker, in return for NT$63 million (US$2.1 million).

Lin, who reportedly demanded a further NT$83 million from the Greater Kaohsiung contractor last year after he began serving in the Cabinet, also faces charges of demanding bribes, concealing illegal gains and keeping unaccountable assets.

In 2005, at the suggestion of its contractors, China Steel shifted from holding open tenders for slag treatment, to signing five-year contracts with three suppliers, including Ti Yung. China Steel renewed the contracts with the same three suppliers in 2010, the Control Yuan said.

This change in China Steel’s tendering process made it easier for corruption and other irregularities to take place, Yeh said.

The censure was aimed at prodding the Cabinet to push China Steel to establish a comprehensive system governing its tenders to prevent further irregularities, Yeh said.